However, as time past by, the personal loan fell due. Mr X still had not repaid Mr B for his loan. Mr B started getting restless and sought to get back his money from Mr X. However, Mr X had no money to repay Mr B, as he needed some time to strip the assets of PLC A, and things were not going as smoothly as he wanted. Eventually, the slick and smooth Mr X calmed Mr B down by assuring him that he would get his money back if he followed his plan. Mr X created a “loan agreement” between PLC A, which he now controlled, and PLC B which Mr B controlled, taking advantage of the already established joint-venture relationship between the two companies. Under this joint-venture agreement, PLC B was caused to provide a loan (of an amount equivalent to the personal loan from Mr B plus his interest) purportedly to PLC A, as financing for their joint-venture project. While that looked appropriate, in substance, the money paid out of PLC B did not go to PLC A, but rather, it went straight to Mr B’s pocket. By doing this, Mr B managed to recover his loan plus interests from Mr X while Mr X had successfully transferred his personal liability to PLC A through this book debts strategy. To camouflage this transaction, the books of both PLC A and PLC B were cooked up via the following accounting entries:

To sum up it up, Mr X had managed to transfer his personal debt to PLC A and PLC B with the use of some accounting techniques so that only the companies bore all the costs.